A new ERGO NEXT survey of 501 small‑business owners nationwide highlights a common regret among entrepreneurs: not fully understanding the insurance coverage their businesses need. The study found that half of owners in their first year wish they had known more about the policies that protect their operations.
Key findings from the survey
Overall, 92% of respondents reported at least one regret from their first 12 months in business. The top regret, cited by 50%, was a lack of knowledge about the appropriate insurance coverage. Even among owners with three to five years of experience, 36% still identified this as their biggest disappointment.
One‑in‑five owners said they did not purchase any insurance because the options were “too confusing.” Additionally, 18% of first‑year owners admitted they bought no coverage at all, leaving them vulnerable to injuries, fires, break‑ins, or other unforeseen events.
Priorities that compete with insurance
When asked what they would have done earlier to protect their businesses, owners listed marketing and customer acquisition (46%) and product or service refinement (37%) as their primary focuses. While these priorities are understandable, the lack of a safety net can create both emotional and financial strain. Seventy‑two percent of new owners said starting a business made them feel more vulnerable.
Understanding the risks
Even among the 82% of respondents who reported having at least some coverage, many were unsure what risks were actually covered. Some purchased general liability policies simply because a client, vendor, or lease required it, without fully grasping the policy’s limits or exclusions.
Owners who operate as sole proprietors often claim they “didn’t need” insurance, yet any business can face lawsuits for poor workmanship, professional mistakes, or property damage. Forty percent of surveyed owners were surprised by risks they had not anticipated when they first opened.
Three steps to improve protection
- Learn about business insurance options. Fourteen percent of respondents said they have coverage but are unsure which risks are included.
- Review existing policies regularly. Only 37% of owners say they review their insurance annually or after major milestones such as landing a new client, moving to a larger space, or hiring additional staff.
- Adjust coverage and limits as needed. Identify gaps and consider increasing policy limits or adding specific coverages to ensure stability.
Common types of business insurance
General liability insurance protects against injuries to non‑employees and property damage caused by the business. It is often required for leasing commercial space or signing contracts with certain clients.
Professional liability (errors and omissions) insurance covers costs associated with professional mistakes, such as a consultant’s advice that leads to a client’s financial loss.
Commercial property insurance safeguards the physical assets of a business—buildings, equipment, inventory, and furnishings—against events like severe weather, theft, vandalism, or fire.
Workers’ compensation insurance is required in most states for businesses with employees and helps cover medical expenses, lost wages, and rehabilitation costs for work‑related injuries or illnesses.
Why insurance matters for family‑run and faith‑based businesses
Many small businesses are family‑owned or operated by faith‑centered entrepreneurs who view their enterprise as an extension of their values. Protecting the business with appropriate insurance not only preserves financial stability but also safeguards the ability to provide for families and support community ministries.
Entrepreneurs are encouraged to consult trusted insurance agents, review policy language carefully, and align coverage with the specific risks their business faces. By taking these steps early, owners can avoid the regret many surveyed expressed and build a more resilient enterprise.
Original reporting: El Paso News (HLL/CB) — read the source article.
